Washington, D.C. – The International Franchise Association (IFA) opposes the Protecting the Right to Organize (PRO) Act (H.R. 2474) that passed in the House of Representatives yesterday. This bill would pose a massive threat to America’s 733,000 franchise businesses and the 7.6 million workers they employ. Already, the joint employer standard that this bill seeks to codify has cost the franchise industry $33.3 billion per year and led to a 93% increase in joint employment litigation.
“This bill is the most anti-franchise bill in modern congressional history. It is the epitome of the American Dream meeting a Washington nightmare" said Matt Haller, IFA’s SVP of Government Relations & Public Affairs. “Unfortunately, the PRO Act seeks to systematically undo the highly successful franchise business model at the behest of Big Labor unions. It would turn local entrepreneurs into mere employees of their brands.”
Specifically, the legislation would codify the vague and unlimited standard for joint employment that was adopted in 2015 by the National Labor Relations Board in its Browning-Ferris Industries decision. As IFA’s members have testified numerous times, the legal uncertainty created by the expanded joint employer standard has had a major chilling effect on the franchise business model.
IFA also has strong concerns with the PRO Act’s codification of California’s new “ABC” test for determining independent contractor status which was adopted in Dynamex Operations West v. Superior Court. The application of Dynamex to the franchise business model could have the detrimental impact of turning every franchise owner into a de-facto employee of the brand.
“Franchising empowers more women, minority, immigrant, and veteran business owners than any other business format. This bill seeks to put that American Dream out of reach for underrepresented populations and communities across the country. If enacted, the PRO Act will have a negative impact on both the future livelihoods of these hundreds of thousands of franchise small business owners, their families and communities across the country.” said Haller.
Matt Haller is available for comment. For additional information or to arrange for an interview, please contact press@RokkSolutions.com.
About the International Franchise Association
Celebrating 60 years of excellence, education and advocacy, the International Franchise Association is the world's oldest and largest organization representing franchising worldwide. IFA works through its government relations and public policy, media relations and educational programs to protect, enhance and promote franchising and the more than 733,000 franchise establishments that support nearly 7.6 million direct jobs, $674.3 billion of economic output for the U.S. economy and 2.5 percent of the Gross Domestic Product (GDP). IFA members include franchise companies in over 300 different business format categories, individual franchisees and companies that support the industry in marketing, law, technology and business development.